In light of the recent crisis and its aftershocks, it becomes crucial to reflect on the relationship between finance and accounting and on how to integrate ethics and efficiency, as well as on how to motivate and empower practitioners in the world of finance to commit to justice, fairness and enhanced understanding, and to improving their personal integrity. This article, written as an editorial introduction to a special issue includes works related to control measurement and ethical behavior, misbehaviors in finances (...) and accounting, professionalism in accounting, ethical investing and corporate reporting. We conclude by suggesting further research for a better integration of technical aspects of accounting and finances into business activity—human activity actually—and an for understanding of ethics not limited to rules, but as a mutual and interdependent system of values, virtues and principles. (shrink)

Accounting professionals play an important role in the generation and auditing of financial statements and, given their understanding of business processes, may be relied upon in the development of organizations’ ethical infrastructures (i.e., the formal aspects of an organization’s ethical environment that are explicitly under the control of the organization). Thus, understanding and improving the work environments of accounting professionals is crucial to improving organizational ethical culture and reducing fraud. In this study, we extend prior research that documents the prevalence (...) of ethical infrastructure programs by assessing how accounting professionals, a key employee group, perceive their organizations’ ethical infrastructures. In addition, we examine whether perceptions of the effectiveness of the ethical infrastructure and professional autonomy influence accountants’ ethical judgments. Based on the responses of 378 CPAs in the United States, we find the perceived state of the ethical infrastructure across accounting work environments—both public accounting firms and other organization types—is relatively strong. However, of the five ethical infrastructure components we examine (i.e., ethics code, ethics training, ethics-based punishments and incentives, ethics reporting system, and ethics review system), only 35% of respondents indicate that their organizations have more than three of these components. Importantly, we find that perceived ethical infrastructure effectiveness and professional autonomy influence both perceptions of the ethical culture and the ethical judgments of accounting professionals. We also contribute to practice by highlighting opportunities for improvement in ethics training formats, ethics-based incentives, and ethics review systems. (shrink)

The compliance-based approach and the integrity approach have been the mainstream responses to corporate scandals. This paper proposes that, despite each approach comprising necessary elements, neither offers a comprehensive solution. Compliance and integrity, far from being mutually exclusive, reinforce each other. Working together, in a correct relationship, they build a harmonized system that yields positive synergies and which also advocates prudence. It enables the generation of a culture of compliance that tends to minimize the technical and ethical errors in decision (...) making. In order to explore an applied harmonized approach, we analyze the audit committee, a specific and broadly accepted regulatory instrument. Formed by non-executive members, regulation requires these members to be dedicated, qualified, and independent as a guarantee of efficiency. We show how the compound of those elements produces positive effects in a context of solid governance. We conclude that it is the strong relationship between efficiency and prudence, in the creation of a culture of compliance, which enables the minimization of errors. (shrink)

Organisational leaders mismanaging business affairs are guided by performance pressures and/or greed while pressurising employees to follow. Unethical activities have led to stakeholder losses, with no accountability by individuals perpetuating the fraud. Corporate governance frameworks and subsequent reforms have been used merely as tick box measures, proving them inefficient in numerous corporate collapses. This study intends to explore and analyse the roles of personal and collective virtues in corporate citizenship. Developing from the virtues theory and using a mixed method of (...) three focus group discussions and a self-administered questionnaire of 119 participants from various organisations, the authors establish that personal virtues are important to portray ethical individualism. However, in a corporate setting, collective virtues are more important to enhance corporate citizenship, through ethical culture and collective accountability. (shrink)

Anticorruption regulators delegate to organizations part of the responsibility for deterring corruption in the form of ethics and compliance programs (ECPs), also referred to as compliance programs, ethics programs, and integrity programs. From this anticorruption perspective, organizations are expected to design and implement programs that comply with general criteria established by regulators to achieve a specific social goal—reducing corruption. This integrative review examines how different communities of practice analyze ECPs in their role as anticorruption mechanisms. Based on a conceptualization of (...) ECP derived from theories of regulation, the review integrates the fragmented literature at the intersection of ECPs and corruption and uncovers connections across communities of practice to propose new insights and research directions. To achieve this objective, the review proposes a process-oriented anticorruption multi-level integrative framework that (1) situates ECPs in the anticorruption process that originated them and (2) identifies the areas where cross-fertilization of ideas from different communities of practice can contribute to redirecting future research. The review concludes with a research agenda that can help advance knowledge applicable to ECPs as anticorruption mechanisms and to other self-regulatory initiatives against grand societal challenges. (shrink)